Casino mogul’s political allies to propose internet gambling ban

Casino mogul Sheldon Adelson became a major player in Republican politics in the 2012 elections, when he spent more than $90 million in an unsuccessful effort to oust Democratic President Barack Obama.

Now the 80-year-old billionaire wants something from Washington: a ban on internet gambling, a growing industry that Adelson says could hurt the casino industry. On Wednesday, some of Adelson’s allies in Congress, including South Carolina Senator Lindsey Graham, plan to propose legislation that would do just that.

The bill is not expected to go far; analysts say Congress may not even bring the measure up for a vote this year.

Even so, the Las Vegas Sands Corp chief executive’s push against online gambling could force Republican politicians to confront an issue that pits religious conservatives who agree with Adelson against more pragmatic elements in the party.

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It also could lead to some interesting moments this week as four potential candidates for the 2016 Republican presidential nomination – New Jersey Governor Chris Christie, Wisconsin Governor Scott Walker, former Florida governor Jeb Bush and Ohio Governor John Kasich – pay their respects to Adelson and his deep pockets during a four-day meeting in Las Vegas.

The meeting in Las Vegas could be particularly awkward for Christie, who last year signed a law legalizing internet gambling in New Jersey, which along with Nevada and Delaware have approved online gambling as a way to boost tax revenue at a time when earnings from land-based casinos have flat-lined. Christie’s office did not respond to a request for comment.

The others who may be courting Adelson’s political support likely will be reluctant to take a public position on online gambling, which is not a big issue for most Americans, said David Damore, a political science professor at the University of Nevada-Las Vegas.

“I think they would try to tiptoe around it as much as they can,” he said.

Similarly, the lack of a national consensus on online gambling probably will discourage many members of Congress from taking up the issue, Republican strategist John Feehery said.

“On these things, if you can avoid taking a stand for as long as possible, that’s always the best policy,” he said.

STATES WARM TO ONLINE WAGERING

Online gambling was effectively outlawed in the United States until December 2011, when the Justice Department backed a court’s decision that said a 1961 law banning interstate sports betting did not apply to other forms of gambling.

In the absence of action by Congress, states have moved to allow online gambling operations within their borders.

Nevada, New Jersey and Delaware now offer some form of internet gambling, and eight other states considered legislation last year. New Jersey, Delaware, Georgia and Illinois sell lottery tickets online. Several Native American tribes that operate casinos are preparing to offer internet play as well.

Some gambling companies see an opportunity to boost revenue as earnings from the 900 land-based casinos in the United States have stagnated.

Adelson’s Las Vegas Sands is not among them.

In an opinion piece on Forbes.com last year, Adelson called internet gambling “fool’s gold” that could hurt business at existing casinos and turn video game-playing children into gambling addicts. Adelson did not respond to a request for comment.

Las Vegas Sands likely wouldn’t be affected if online gambling became widespread in the United States because it makes most of its revenue abroad, said Morningstar analyst Chad Mollman. But a federal ban could hurt rival casino companies that are counting on online gambling revenue to offset flat or declining earnings from their casinos, he said.

In Washington, Adelson has set up a lobbying group called the Coalition to Stop Internet Gambling.

“It’s common sense that putting a virtual casino in the pocket of every American with a smartphone is bad public policy,” the group said in a statement.

In response, Adelson’s rivals, including Caesar’s and MGM Resorts International, have created their own group, the Coalition for Consumer and Online Protection. They argue that efforts to block online gambling haven’t worked and that states should be able to regulate the issue.

“For Congress to come along and stop these efforts is a mistake,” said Mary Bono, a former Republican representative who is a spokeswoman for the group.

In Congress, Senator Graham, Republican Representative Jason Chaffetz and Democratic Representative Tulsi Gabbard will introduce the Adelson-backed legislation that would outlaw internet gambling. Graham faces re-election this year in conservative South Carolina, while Chaffetz and Gabbard are from Utah and Hawaii, respectively, where all forms of gambling are illegal.

Adelson also has enlisted religious conservative groups, who play an influential role in Republican presidential primaries.

Bob Vander Plaats, head of The Family Leader, a social-conservative group in Iowa, said online gambling has not come up in his meetings with potential candidates for the Republican presidential nomination in 2016.

“But as it becomes more and more of a threat, I do believe you’ll see full-spectrum conservatives definitely taking a stand,” said Vander Plaats, who has not worked with Adelson’s group.

Advocates opposed to limits on online gambling say that such restrictions would conflict with the Republican Party’s traditional suspicion of federal regulation.

“I think you’re going to see a real divide in the Republican electorate,” said John Pappas, executive director of the Poker Players Alliance, which has mobilized thousands of members to support Internet-based poker games.

LOOKING TO 2016

Adelson has another ace up his sleeve: the promise of campaign cash in the 2016 presidential race. Adelson and his wife, Miriam, donated at least $93 million to Republican candidates and causes in the 2012 election, making him by far the biggest publicly known donor in either party that year.

Adelson told The Wall Street Journal shortly after the election that he intends to spend more on the 2016 elections.

So far, Adelson has lined up support for his online gambling ban from Republican governors Rick Perry of Texas and Bobby Jindal of Louisiana, both potential presidential candidates.

Adelson will have the chance to discuss the issue with Christie, Bush, Walker and Kasich in Las Vegas this week, when the governors attend a meeting of the Republican Jewish Coalition. Adelson is hosting a dinner for which Bush is the keynote speaker.

Adelson has backed Christie despite their disagreement over online gambling. Adelson hosted Christie for a fundraiser in Las Vegas last August and donated $3,800 to his re-election campaign, New Jersey records show.

Adelson has been a particularly enthusiastic supporter of Walker, donating $250,000 when the Wisconsin governor fought back a recall campaign in 2012, according to the National Institute on Money in State Politics.

Walker has not taken a stand on internet gambling but may have to confront the issue soon because of growing support for it among Native American tribes in Wisconsin. His office did not respond to a request for comment.

The Lac du Flambeau band of the Lake Superior Chippewa is planning to offer internet gambling to those who are physically on the tribe’s lands. Tribes oppose a federal ban on such gambling on the grounds that it would interfere with their revenue-raising efforts, said Jeff Nelson, a lawyer with the Indian Gaming Alliance.

In Ohio, Kasich oversaw an expansion of casino gambling in his state but has not take a position on internet wagering, an aide said. Bush also has not taken a public position.

Even if Adelson lines up support for the ban among potential 2016 candidates, that will not do much good if Congress does not act soon, analysts say.

“The cat’s out of the bag, to be sure,” said Michael Pollock, managing director at Spectrum Gaming Group, a research firm.

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(Additional reporting by Hilary Russ in New York; Editing by David Lindsey and Eric Walsh)